5 July 2024

Waking up to a new UK Government

We are waking up to a new UK government after a landslide Labour victory in yesterday’s general election and, whilst the overall outcome will not come as a surprise to many, it will undoubtedly bring questions about what future policy may look like. Rumours of changes to pension legislation and tax rates have dominated headlines over the past few weeks but it will be some time before things settle down and we gain a fuller understanding of our new government's priorities.

What will Carbon be doing as a result?

Immediately, nothing. We will be assessing changes as and when they happen rather than speculating on what policies may change and the impact of them. Once a concrete plan of action or priority list with further detail is put in place, we can then determine what action, if any, needs taken to your long term financial planning strategy.

What implications are there for my investment portfolio?

Again, none immediately, and there are unlikely to be any long-term implications as capital markets are very efficient at pricing in expected change. A new labour government by a significant margin has been the general expectation for some time and market prices are likely to reflect that already. Markets may react in the immediate aftermath, either positively or negatively but evidence supports that changes of government have very little impact over the long term. The below chart shows how the UK stock market has performed across different governments to illustrate this. Bear in mind, that most clients do not have a substantial exposure to the UK stock market in their portfolio given our globally diversified outlook.

Source: Dimensional Quick Take *

*Investments involve risks. The investment return and principal value of an investment may fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original value. Past performance is not a guarantee of future results. There is no guarantee strategies will be successful.

What if I have other questions?

Please reach out to your financial planner or if you are new to Carbon, send us an email or pick up the telephone and we would be delighted to chat through your questions.

The value of investments and the income derived from them can fall as well as rise. You may not get back what you invest. This communication is for general information only and is not intended to be individual advice. It represents our understanding of law and HM Revenue & Customs practice. You are recommended to seek competent professional advice before taking any action. Tax and Estate Planning Services are not regulated by the Financial Conduct Authority. Tax treatment depends on the individual circumstances of each client and may be subject to change in the future.

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